Apple goes big screen with iPhone 5

Apple introduced the iPhone 5, with a bigger screen and slimmer body that analysts quickly branded a sure hit for the culture-changing tech giant.

Apple chief executive Tim Cook called the launch "the biggest thing to happen to iPhone since the iPhone."

The California company called the iPhone 5 "the thinnest smartphone in the world," with a glass and aluminum body that is 18 percent thinner and 20 percent lighter than iPhone 4S.

The new iPhone has a rich four-inch (10-centimeter) display prime for the red-hot smartphone market, in which screen size is a key factor for buyers, according to Nielsen senior vice president Jeff Wender.

At a packed launch event in San Francisco, Apple marketing chief Phil Schiller praised the new iPhone as "an absolute jewel."

Apple will start taking orders for the phone Friday and begin shipments on September 21 in the United States, Canada, Britain, France, Germany, Australia, Hong Kong, Singapore and Japan, and the phone will be available in 100 countries by the end of the year.

Pricing for US customers will start at $199 with a two-year telecom service contract.

Schiller said the taller iPhone nestles in one's palm to naturally align with thumbs and works on the faster mobile Internet networks known as LTE.

"When you carry your phone it should fit beautifully in your hand, that is just how we designed iPhone 5," he said. "Everything you do looks gorgeous on this beautiful widescreen display."

The new device features Apple's own new A6 processor, which according to Schiller doubles the speed for loading Web graphics.

"The primary purchase drivers for smartphones are price, features, operating system, apps and screen size," Wender said during an iPhone 5 hands-on session. "Apple addressed all those key drivers today in spades."

Battery life, a key complaint of smartphone users, is extended to eight hours with mobile phone and browsing and 10 hours if Wi-Fi connections are used.

Apple also customized a sophisticated mapping program, upgraded its voice-activated assistant known as Siri and more tightly integrated Facebook.

Analysts expect Apple to sell tens of millions of iPhone 5 models in the coming months.

Morgan Stanley analyst Katy Huberty said Apple may ship between 48 million and 53 million iPhones in the fourth quarter and "up to 266 million" in 2013.

But NPD analyst Stephen Baker cautioned that the key US market has grown "increasingly mature" since previous iPhone launches.

He argued that it would be "more difficult for Apple to easily take share from weakened competitors, because many of the easy share gains have already been accomplished."

Apple has fierce customer loyalty and has been rapidly gaining users, but has failed to keep pace with smartphones powered by Google's Android operating system.

Research firm IDC said Apple had 16.9 percent of the global smartphone market, with 68 percent of the market held by makers of Android phones, led by Samsung.

"I think we will see some reaction that Apple didn't do enough and that some of the features are just catch-up," Forrester analyst Charles Golvin said after the event.

"But when you look at the way the whole package is put together in a beautiful, thin, light device, you'll see that Apple has taken another step."

An iPhone change with the potential to irk fans is a new "Lightning" connector to replace 30-pin connections, the piece that connects devices to computers, power outlets or docking stations.

Apple will sell adaptors for plugging new generation iPhone and iPod touch devices into accessories already owned, such as stereo speakers or car sound systems.

The change prompted popular wireless headset and speaker maker Jawbone to release a YouTube video showing stereo dock accessories exploding in time with "The Blue Danube Waltz" by Johann Strauss.

"We think the dock is dead," said Jawbone chief executive Hosain Rahman. "Some people are worried about the connector news making their mobile docks obsolete, but we think docks make your mobile device immobile."

"The future is wireless," said the head of the company behind Jambox speakers.

Apple shares, which hit record highs this week and extended the company's position as the world's most valuable firm, rose 1.39 percent to $669.79 on the news. Shares inched up to $671.20 in after-hours trades on the Nasdaq.

Stocks in Apple's Asian component suppliers were mixed Thursday, however, with analysts citing uncertainty over the new model's potential impact on the hugely competitive smartphone market.

But Ben Reitzes at Barclays said Wednesday's announcement "marks the beginning of a distinctive holiday season for Apple that blends today's iPhone launch with the iPad mini launch."

Apple is widely expected to launch a smaller version of its market-leading iPad tablet computer later this year.

Wednesday's launch event also unveiled a new lineup of music players, including the iPod touch -- essentially an iPhone without mobile connections -- and the iPod nano.

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